Capitalism’s Brave New World

We have seen the future, and it microtasks

Jonathan V. Last

July 16, 2012, Vol. 17, No. 41

Tired of journalism’s glamour and prestige, I decided to take a second job last week. I went to Amazon.com’s Mechanical Turk website—a sort of virtual job fair matching thousands of businesses and online workers—and got a microtasking gig. It didn’t take long. I filled out a few forms, proved I was a live, human being with a functional email address, and Amazon put me to work. My first assignment was for an employer called “CrowdSource” and the task was to type a provided search term into Google, click on the first result, and copy that page’s URL into my work page.

I have no idea what function this job could possibly serve, except to help someone game, or learn to game, the Google search algorithm. But I wasn’t getting paid to think. I was paid to type, click, copy, and paste. I completed eight of these microtasks in less than two minutes. I was paid 16 cents. Or rather, I will be paid 16 cents at some later date—provided that CrowdSource turns out to be a legitimate operation that pays its bills. Which, in the world of microtasking, is not a guarantee.

Welcome to the digital economy.

There is a certain view of economics that regards Amazon’s Mechanical Turk as both a utopian scheme and a vision of the future. Free-marketers and libertarians will be awed by the spectacle of an untrammeled labor market: A cavalcade of employers make available a wide variety of work. The jobs and compensation are exhaustively defined. A multitude of laborers examine this menu and decide which jobs appeal to them and whether the compensation is adequate. No one is forced to take a job he doesn’t like. No one gets tricked into a job he didn’t sign up for. In the world of Amazon’s Mechanical Turk, there is no employment discrimination, none of the inefficiency and unfairness produced by credentialing regimes, and no workplace politics. Work is reduced to its purest components and as a result, opportunities for both employers and employees are increased. If you were sketching a graph of social utility, the Mechanical Turk sends a line asymptotically to the ceiling.

The only people who aren’t down with the Turk are the kind of bleeding-hearts who think that 16-cent jobs are a violation of human rights and that nonunionized workforces are herds of cattle marching across the grated steel floor of the corporate rendering plant—the complaints typically following the Occupy Wall Street line about serfdom and income inequality.

The hippies are wrong in the particulars. But they still may be on to something. Because while it’s true that the new world of anonymous, mass, remote freelancing may be a perfect distillation of a textbook labor market, it’s also a radical change in Americans’ understanding of the social compact between business and the citizenry. And it’s not clear that this change is for the good.

It’s worth appreciating the breadth of the change microtasking represents. It breaks up jobs into astonishingly small tasks—a job might take a minute, an hour, or a day. Imagine an assembly line that can be de-constructed and dispersed so that, instead of having to clock in for an eight-hour shift, workers can be paid by the piece. They show up to the line and do as much, or as little, work as they like. Yet because the line is decentralized over a large network of potential employees, it always runs smoothly.

Microtasking also obliterates geography—you can work from a bar in midtown Manhattan, a basement in Montana, or a brothel in Manila. And it wipes out the entire universe of credentials and gatekeeping. Gone are wasted years at Big State and master’s degrees in Lesbian Poets of West Africa. The Mechanical Turk makes jobs available to anyone willing to work.

The implications of such a job market are far-reaching. Imagine what instant access to an abundant supply of jobs could do for, say, the rural poor in Alabama. Whereas today escape from poverty requires some social skills, some education, and mobility, with the Mechanical Turk it requires only a computer with Internet access.

Flip the telescope around and you can see that it opens up worlds for business, too. Microtasking allows even relatively small businesses to scale a workforce up or down as needed. A startup company in Seattle with 3 employees can hire 1,000 people for an afternoon of work on a big task—at a moment’s notice. Then, when the job is done, it can instantly downsize.

From a practical standpoint, there are a couple of open questions about microtasking. The first is how meaningful the jobs it deleverages can be. When you look around the world of microtasking on exchanges like Mechanical Turk, the tasks fall into categories that are fairly Internet-specific: Look up the email address of a business; answer a question about a Twitter user; choose a category for a website; write a headline for a video clip or a review of a product. The jobs these tasks combine to accomplish aren’t about any real work so much as they’re about the Internet itself. Nearly all the companies that employ microtaskers are Internet companies. It’s mostly data entry, search-engine optimization, and the like. Which means that it’s only value-added by the debased standards of the web. If microtasking really is going to be the future—if the Mechanical Turk is someday going to displace the temp agency and the HR recruiter—then someone will have to break more meaningful jobs down in a way that lends itself to microtasking.

Which leads us to the second question: How big could it get? It’s difficult to say, of course. Amazon says that there are 500,000 workers using its system. Write.com, a smaller microtasking site that focuses on mini-writing assignments, says that 20,592 writers have completed 478,046 jobs for employers. (Earning a total of $718,933; or $1.50 a throw.) Elance.com is a more upscale Mechanical Turk. It matches businesses with remote temporary workers who have the skills to handle more demanding tasks such as computer coding or database cleaning. Workers set the price in a kind of reverse auction by posting their hourly rate with their profiles. Elance recently surveyed the businesses it works with and found that 57 percent of them expected that, within five years, more than half of their workforces would be made up of remote, temporary workers from around the world.

It’s that last clause that should give us pause.

The Internet is a disruptive technology, but thus far it has disrupted the labor market less than might have been expected. Most companies still employ people who live near them for the simple reason that most jobs require people to be in a particular place, at a particular time, so that they can work together. A company in San Francisco whose business is attracting visitors to a website with funny images of cats might be able to hire a microtasker in Jakarta to assign metatags to cat pictures so that users searching Google for cat images will be more likely to find their way to that company’s website. A maker of medical devices in the suburbs of Philadelphia needs people to show up in the office to perform research, design a manufacturing process, orchestrate a supply chain, and plan a marketing and sales campaign. Twenty-five years into the Internet age, this geographical tie between work and workers has proved surprisingly stubborn. And it is precisely this tie which the Mechanical Turk and its brethren seek to destroy.

There are good reasons to welcome the uncoupling of work and geography. For instance, it would produce immediate and sizable gains in economic efficiency. But there are also some reasons to be suspicious because two developments have changed the relationship of business to the American people. The first is the invention of the corporation.

Because they are perpetual and, in a certain sense, unaccountable, modern corporations have a different set of interests than flesh-and-blood people, and a very different relationship with the people’s voice—government—than old-fashioned sole proprietorships or partnerships. A business owner is a citizen, with the same mix of interests and obligations as other citizens. He might serve in the military or run for office. He has political concerns that run the gamut from worrying about local schools and trash pickup to national fights over gay marriage. He is interested in these issues, and how his government responds to them, because he is a citizen, with fellow citizens who look out for him and vice versa. By contrast, the corporation by design has only an interest in its own survival and profitability: It will concern itself with government insofar as it can enlist the government in helping it make money. On every other question, the corporation is, by definition, indifferent.

The other development is the rise of multinational corporations following World War II. As communication, shipping, and jet travel improved, it became practical for large corporations to do business abroad. They built factories in other countries, hired foreign workers, and eventually learned to pit countries against one another in order to get the best deal they could with their taxes and regulations. From there it was just a short step to transnational corporations—business concerns which operate without any true home country. This metamorphosis completed the corporation’s evolution to something like a semi-autonomous sovereign: The corporation pursues its own interests, as it understands them, from whatever geographic position (and under whatever legal regime) it finds most accommodating at the moment. It becomes a city-state without land.

None of this is sinister. There is probably no better way to organize large industrial concerns and make them as efficient as possible. Under the traditional arrangements Americans have had with business for the last 200 years, our relationship with corporations has been mutually beneficial. America provides a hospitable environment in which businesses can prosper. As they prosper, businesses create wealth for workers and investors. And the arrangement creates a loop of prosperity as consumption, education, and innovation combine to elevate the lives of all concerned.

At the heart of this loop is a social compact. America provides business with an enormous basket of essential goods. There’s the physical capital—roads and sewers. Then there’s the human capital—a literate, educated workforce with a reasonably benign cultural disposition. All of which, you could argue, businesses pay for with their taxes. But infinitely more valuable is America’s social capital. If you run a business in America you usually don’t have to bribe every government official who comes by to inspect your workplace. When you interact with the police, they are likely to help you rather than ask for protection money. If a competitor damages you, there is a legal regime that can be engaged with some modicum of impartiality. Property rights are generally secure and respected. The criminal code is explicit and routinely enforced. Corruption—a deadly poison for economic life—is rare and the political order is stable enough to be disregarded as a cause for concern.

These benefits aren’t really paid for by anyone’s taxes. They are the legacy of 250 years of American labors, on the battlefields, in the courts, and at the ballot box. They are intangible yet irreplaceable and, literally, priceless.

Americans have loved commerce since the Founding and they give these wondrous gifts to business freely. In return, they have traditionally asked only one thing: that business owners participate in the life of their communities.

A company that builds a factory in San Antonio should employ Americans to staff it and not have Mexican laborers commuting back and forth over the border. This may not always make good business sense—after all, if Mexican labor is cheaper, using it is more efficient. But America’s historical compact with business is about bigger things than efficiency, and if a company wants to employ Mexicans it’s free to build its factory in Mexico.

Yet it’s this geographic link that the remote freelancing revolution threatens to sever. The problem it poses isn’t just that American companies will offload low-skill, microwage jobs to Mexico (or India or Vietnam or Cambodia). The rise of remote, freelance microtasking means that the relationship between business and America becomes a one-way street: Americans provide a welcoming social order for business, and business is still welcome to fish in the global labor pool for the cheapest workers.

When you combine these two transformations—business’s evolution from the individual to the corporation and its newfound ability to exist in, but not of, the place it physically inhabits—you create an environment where a business is less like a citizen and more like a virtual state. A semi-sovereign. A parasite, the hippies might say.

That's an exaggeration, of course. Commerce is the indispensable engine of American life, and has been since the country’s earliest days. (Before the revolution, George Washington created and ran the Patowmack Company, a private venture dedicated to turning the Potomac river into a toll waterway via a series of locks and canals.) And in any case, the liberal critique of microtasking is usually that it somehow isn’t “fair” for the Mechanical Turk to pay someone 16 cents to do a job that takes 90 seconds.

But the real concern isn’t wages, per se. (There are some services, like Odesk.com, where highly specialized freelancers command as much as $25, $45, even $80 an hour.) It’s what happens when labor is, for the first time in human history, uncoupled from geography.

Perhaps the free market true-believers will be right. Maybe the increased efficiencies will trickle down through the economy and the rising tide will lift all boats. Maybe the tech company in San Francisco that hires microtasking Pakistani temps, instead of local workers, will be able to use the money it saves to create even more value and wealth, which will eventually find its way into the San Franciscan, or at least the American, economy. Maybe, too, the ability to switch employers on an hourly or daily basis will be a type of liberation for workers. Instead of chafing for years under a petty tyrant of a boss, you can quit your job at noon after a thankless morning and start a new job with a different employer after lunch.

Or perhaps it will turn out that the ability for any business to outsource any task, no matter how small, will not just deprive local workers of work, but will drive down local wages even for other forms of work. Maybe the bulk of the economic benefits will be realized abroad and businesses will become ever more mercenary “citizens of the world,” which is to say, not citizens at all by any traditional understanding of the concept.

Whether the end result is good or ill, this will not be business as usual—it represents a sea change in the relationship between business and the citizenry, and it is something wholly new to the American experience. And despite the foolish protestations of some on the left, conservatives should greet it with, at most, two cheers.

Conservatives, in America anyway, have long had a natural sympathy for business. But they have also cultivated an appreciation for the unintended consequences of systemic disruptions. This is why conservatives have been wary of epochal social changes, especially those flying the flag of liberation, such as the advent of the birth control pill, the rise of no-fault divorce, and gay marriage. If the geographic linkage between American businesses and the American people is dissolved, it is impossible to predict what will happen next.

The websites for microtaskers Mechanical Turk, Odesk, and Elance note that they serve employers as big as AOL, Google, Citigroup, and Microsoft and as small as the Mom and Pop business next door. Yet when you click through the lists of available workers waiting to serve these businesses, more often than not—far more often, actually—they’re from Pakistan or Turkey or India or Serbia, rather than the United States.

Where, coincidentally, the unemployment rate is 8.2 percent, and the real jobless rate is closer to 15 percent.